Avanex files complaint against S3 Photonics

LONDON  Photonics components group Avanex Corp. is blaming its former French subsidiary terminating prematurely a distribution agreement for a revision of its guidance for its second fiscal quarter of 2008.

Avanex (Fremont, Calif.) said Thursday (Dec. 27) revenues will be lower because of 3S Photonics' (Marcoussis, France) actions, and added it has filed an arbitration complaint against its former subsidiary, Avanex, France, which before that was Alcatelís optronics operation.

It now expects revenues of $51 million to $53 million for the second quarter ending December 31 2007, down from a previous second-quarter outlook of $56 million to $58 million.

The complaint, which alleges various breaches by 3S Photonics of its obligations to Avanex, including that 3S Photonics prematurely terminated its exclusive distribution agreement, was filed in New York.

Avanex also said it does not expect to receive future distribution revenue associated with 3S Photonics, which will reduce its revenues for the third fiscal quarter, resulting in flat to slightly lower revenues for the third fiscal quarter compared to the second fiscal quarter.

Avanex believes gross margins for the second fiscal quarter will be consistent with the prior quarter.

3S is an established supplier of submarine pump laser modules, but is now aiming to break into the terrestrial pump module market as well.